Tax query
This query is : Resolved
14 December 2014
Hello Sir
I (land owner) have entered into a development agreement with a developer for construction of residential flats on my land. The owner allocation will be 40% of the constructed area while the developer will take away rest 60% and have the rights to sake his part. Whereas the land owner has received his 40% of constructed area he has kept it as it is (he had not sold his part and the rights are with him).
I want to know will any tax be levied on the land owner as there is no cash transaction and he only received 40% of the constructed part.
15 December 2014
The capital gain accrued by the owner will become taxable on the date of transfer/sale.
The full value of consideration you receive from this transaction will be considered as the construction cost of the built-up area allocated to you based on the agreement between you and the developer.
The full value of consideration you receive from this transaction will be considered as the construction cost of the built-up area allocated to you based on the agreement between you and the developer.
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